Almost too late to play defense, fund manager says

Sandy Villere III, co-manager of the Villere Balanced Fund
says “it’s almost too late to play defense,” given market and economic conditions, and that “it’s time to find some good growth companies and buy them at reasonable prices.”

In the MoneyLife Market Call interview with Chuck Jaffe, MarketWatch senior columnist, Villere noted that while he does not expect to see a significant increase in interest rates until late 2014, he is reducing the bond exposure in his five-star balanced fund in part out of worry about what could happen next.

“If you just look back to March of ’09, you have seen about a trillion dollars come into bond funds and have seen $138 billion come out of equity funds,” Villere said. “The herds have rushed into bond funds and I don’t want to be around when the herds rush out.”

His other reason for minimizing bond exposure is the ability to cash in on stocks.

“With the fiscal cliff issues, the election and all this uncertainty, there are a lot of opportunities,” Villere said. “If you are careful and consider yourself a stock picker, you can really dig through the rubble and find some unbelievable companies trading at really reasonable prices given their growth profile.”

Among the stocks that fit that bill, Villere singled out Sotheby’s
and Carnival Cruise Lines
as stocks that have big positions in their industry and that are stocks that other investors have “discarded” for economic and headline reasons.

During “Hold It or Fold It,” when guests give their appraisal of stock requests made by the MoneyLife audience, Villere noted that he would sell Facebook
, Google
, Hewlett-Packard
and Westar Energy
, and said he would be a buyer of Leggett & Platt
and Flowers Foods
.

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